If a consumer is at an optimum, consuming X and Y, and the price of X increases, then to get to a new equilibrium the consumer must
A) purchase less X.
B) purchase less Y.
C) purchase more X.
D) purchase more of both X and Y.

Question

Quizplus · Accepted Answer

When the price of X increases, it becomes relatively more expensive compared to Y. As a result, the consumer will reduce the quantity of X demanded and substitute it with Y. This adjustment will ensure that the consumer remains at an optimum level of satisfaction or utility. Therefore, the correct answer is to purchase less X, as stated in option A.

If a Consumer Is at an Optimum, Consuming X and Y